Quinn's €1.6bn administration costs "truly shocking"

The administration of Quinn Insurance could require €1.65 billion from the Insurance Compensation Fund, the Irish Times reported.

The amount, used to pay for claims and costs, was described as “truly shocking” by the president of the Irish High Court.

Justice Nicholas Kearns noted the court was originally told no funds would be required from the fund, then was told last October monies would be required from the fund and the cost of the administration would be approximately €738m, a figure later increased to €775m.

The paper said he has sought the “clearest of explanations” for this information and has asked to ge given it next week.

The likely outcome is that the 2% government levy imposed on motor and home policyholders in the wake of Quinn’s administration will last “in perpetuity” and not for a limited number of years as originally envisaged by the government, he noted.

Lawyers for the joint administrators appointed to Quinn Insurance, Michael McAteer and Paul McCann, said a number of factors had led to the increase in the amount being sought from the Insurance Compensation Fund, including an increased and more pessimistic provision for claims, the Euro weakening against sterling and the reduced value of Quinn Insurance investments in assets, including property assets.

Bernard Dunleavy, for the administrators, said the figure was “an absolute ceiling” and based on a worst case situation. The actual level of drawdown was expected to be somewhere between €1.1 billion and €1.3 billion, he added.